Trinseo said it expects a net loss from continuing operations of $367m-362m, which includes a pre-tax, non-cash goodwill impairment charge of USD297m related to its PMMA business and Aristech Surfaces reporting units, said the company.
Frank Bozich, president and CEO, said in the advance notice that the loss also includes a pre-tax unfavourable net timing impact of USD19m from declining raw material costs as well as a USD15m unfavourable impact from natural gas hedges that were put into place in the second half of the year.
The company will host a conference call to discuss further details of its Q4 and FY 2022 financial results on 9 February. “Our fourth quarter results reflect a challenging operating environment including a continuation of customer destocking, lower underlying demand, and volume and margin impacts from lower-cost imports into Europe from Asia,” Bozich said.
“As a result, our earnings and cash generation were below our previous expectations. However, due to proactive operating decisions such as idling styrene production throughout the fourth quarter, we saw a considerable sequential Adjusted EBITDA improvement of more than USD40m,” Bozich said. “Further improvement in the first quarter is expected given seasonally stronger demand, lower energy prices and the realisation of our asset restructuring initiatives,” the CEO said.
Regarding the impairment charges, Bozich pointed to a challenging macroeconomic environment, including significantly lower demand for building and construction and wellness applications, which led to lower operating results including slower growth projections as well as a prolonged drop in market capitalisation.
We remind, Trinseo, a specialty material solutions provider and Japan Steel Works Europe GmbH (JSW EU), a group company of The Japan Steel Works, Ltd. (JSW), a manufacturer of industrial and plastics machinery, recently announced a collaborative effort on chemical recycling of polymethyl methacrylate (PMMA).
Trinseo a specialty material solutions provider, partners with companies to bring ideas to life in an imaginative, smart, and sustainability-focused manner by combining its premier expertise, forward-looking innovations and best-in-class materials to unlock value for companies and consumers. From design to manufacturing, Trinseo taps into decades of experience in diverse material solutions to address customers’ unique challenges in a wide range of industries, including consumer goods, mobility, building and construction, and medical.
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